We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Bailing out the auto industry offers no net gain to society. It is a straight transfer of resources from one sector to another: we tax money, or borrow it from a finite pool of capital available to the nation, and spend it on auto workers. The people who pay the taxes, or the people who would have borrowed that investment capital, now have less to spend. Whatever they would have bought goes unbought; whoever would have made it goes unemployed. To coin a phrase, what is made on the swings is lost on the roundabouts We have the illusion of a gain only because that other group of people is invisible. Even if we don't bail out GM, they will not be visible--we will never know who didn't lose a job or a business because we declined to spend one squillion dollars saving the Chevy Cobalt.
It's been as clear as day to everyone for years that the once-Big Three are lousy companies with lousy businesses, products that don't sell, and that nobody wants to invest in anymore - except politicians. We're a Toyota country now (except for the Ford F series).
But who ever said raw politics has to make logical sense? This is called vote-buying, and a big thank-you to Michigan for going blue by supporting existing union contracts. With our money. There is a certain sort of political logic in that.
Comment from The Barrister: What is often left out in these discussions is that bankruptcy would not put these companies out of business and these workers out of work. They would reorganize (and renegotiate contracts), or sell off their parts.
And from BD: Follow the money. Best I can figger, all that a bailout would bail out is the existing union contracts, and little more.
And from the NJ: I would not be happy to be working to support Michigan union benefits, which are so much more generous than mine - or those of most folks - that it's ridiculous. Why would I want to do that? Those businesses are obsolete, but somebody is going to try to sell us the notion that they need my money to go green, or some similar BS. Toyota already did that.
Time to send top Wal-Mart management TDY to Detroit. Appoint Wal-Mart the receiver-in-bankruptcy and let them sort the mess out. They receive a big chunk of common stock in the new companies wherein the bonus-less payout depends on growth, profitability, and a higher stock price. Employees- union, non-union- are all tied in to the common stock so no increases unless and until the profit is in the till. Back to the basics, back to reality. Next they can do the same for health care.
I spend 2 extended periods in America a year and during these visits I hire several different cars... most of the big three cars have been an unpleasant experience (edge and hummer were reasonably decent) whereas cars such as infiniti have been a pleasure....doomed!
I seem to recall Ross Perot as a GM boardmember who demanded changes in the mid-1990s. He opted out of GM as the board rejected Perot and his ideas. Ross made certain predictions regarding GM's future demise if things did not change...Perot saw the handwriting on the wall long ago it seems. Also, Chrysler is now owned by private equity fund Cerberus. And, Chrysler's CEO is Bob Nardelli formerly of Home Depot where he paid himself a half a billion dollars even though Home Depot lost market share to Lowe's...No bailout!!!!!!!!!!!!!!!!!!!!!!!!! We have a system whereby companies re-organize when they have hit a profitibility wall...It's called bankruptcy.
The only purpose of a bailout is to prevent a reorganization in bankruptcy that would all but wipe out the unions. That is why the Dems are pushing this so hard. The unions helped buy the White House and now they want their payback.